New research has shown that although first time buyers are only a couple of years older now than they were 30 years ago, many more are utilising equity release funds from their parents to pay their deposit.
HSBC`s new Property Path report notes that the average age that people moved into their first property in the 80s was 27. That`s not changed much today, with the average age being 29 – the real difference is in the deposit: 30 years ago, it was around £1,000, while today it`s closer to £30,000.
While inflation may have boosted the difference between those two numbers, as a percentage of the borrower`s annual income, the deposit made up just 12 per cent of the 80s borrower`s annual income, compared to 82 per cent for the modern buyer.
With the parents of first time buyers now being in their mid-50s and 60s on average, they are more likely to have paid off a fair proportion of their mortgage and be in a position to utilise equity release in order to aid their offspring in being able to set foot on the property ladder.
An example of an equity release scheme is a lifetime mortgage which allows people who are approaching retirement to unlock the money that`s built up in their home without needing to leave the property they`ve lived in for much of their lives.
As well as helping to pay for their children to set off on their own housing adventure, the money can also be utilised to pay for a treat for yourself, supplement your income or allow you to afford a better standard of care for your loved ones.
Discover more about what equity release schemes we have access to by visiting us at firstchoicefinance.co.uk or by calling us on 0333 003 1505 on your mobile or 0800 298 3000 from a landline.
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